India has emerged as one of the biggest consumers of tropical timber in the world, with sizeable imports from Malaysia, Myanmar, Indonesia, New Zealand, and lately from Africa and Latin America. The resurgent economy, expanding middle class and burgeoning infrastructure, spurred by lucrative housing schemes, commercial constructions and rapid urbanisation has upped the demand dynamically. This is offset, however, by the stagnant supply of timber locally. This supply is constrained by the fuelwood consumption, curbs on timber harvesting and natural degradation of forests.
Some critical facts emerged during our recent research for a review of the timber market, by the International Tropical Timber Organization (
itto). India has 16 per cent of the world's population, but only one per cent of the world's forests, with barely one tenth of the average global productivity per hectare. Among the
itto's producer countries, India has the lowest per capita forest area. Over one-third of existing forests have sparse tree cover. Trees outside the forest supplement forest produce. These barely cover 2.5 per cent of the land area, but are turning into an important resource, especially for the panel, pulp and paper industries.
As a result, annual industrial roundwood imports have trebled in the last five years to over 2 million cubic metres. By 2012, they may hit 10 million cubic metres. Medium- to long-term prospects for tropical timber imports by India are enormous. Trends indicate industrial roundwood consumption of over 70 million cubic metres, with a gap of over 14 million cubic metres between potential demand and domestic supply.
However, the Indian timber market remains chaotic, leading to a discernible shift towards substitutes like plastics, aluminium and steel (around 25 per cent of wood volumes) in construction and furniture. Not good news for the environment or the economy, as these substitutes from non-renewable resources are pernicious polluters and high-energy consumers.
This is despite India having one of the oldest world class forest services and centres of excellence in marketing, statistics and economics, many of which participated in the
itto Review. Yet the timber market -- producers, traders, constructors and consumers -- has no reliable source of timely economic information. Modern systems, import facilitation and market diversification can leverage investment resources, promote joint ventures and propel India into value-added exports.
India can also count on its strategic space in the global market, both as a potential exporter and as an importer of premium tropical timber. With its advantageous location (between dynamic markets in East Asia, the Middle East and Europe) and appropriate eco-labelling and certification, Indian timber shouldn't have a problem in putting finished products onto the shelves of major retailers worldwide, as China is doing, despite the shortfall in domestic supply.
For India to meet its rising requirements and conserve the remaining forests, a reform of the forest sector is called for. Almost 200 million poor people are dependent on forests and outside trees. Focussed conservation could balance their needs with forest protection. Organising industry, building multi-stakeholder partnerships and raising awareness about wood products need a futuristic vision and accessible, reliable economic information, market intelligence and an efficient forest-sector statistical system in place.
The
itto could help advance this reform process. Set up as an inter-governmental organisation for delivering the International Tropical Timber Agreement, the organisation has strengthened national capacities, forest sector statistics and market intelligence. Member countries have appreciated the role played by
itto in promoting sustainable forest management and trade. Future goals: holistic forest management and conservation and gaining from the prospects for timber trade and commerce.
Maharaj Muthoo, president, Roman Forum has initiated notable global forestry programmes and recently authored the Indian Timber Review
